FTSE 100 ignores the negatives to push higher; mixed bag of retail updates

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  • FTSE 100 index gains 20 points
  • Tesco lower after festive trading news
  • Boohoo also drifts back after update

8.45am: Positive start to Thursday

With investors quickly treating US political turmoil as the norm – or else resigning themselves to the fact that it will/should be over soon – the FTSE 100 opened in a chipper mood on Thursday morning.

The index of UK blue-chips opened 20 points to the good at 6,765.83.

The three wise monkeys must have been in charge of price-setting early on as traders also seemed willing to overlook the mounting health crisis both here and abroad.

On the market, the focus continued to be on the retail sector post-Christmas with the old economy represented by Tesco (LON:TSCO) and the new by Boohoo (LON:BOO).

The unifying theme? Shares in both were out favour on Thursday.

The former first: While analysts seemed impressed by the grocer’s record festive showing, the market wasn’t as the shares slid 1.7%.

The weak spot was Booker, the cash and carry business, which struggled in lockdown as customers such as restaurateurs and cinema owners were forced to close their doors.

Boohoo performed more than creditably, but this still wasn’t enough to deter investors booking some profits on shares that have risen 44% since October 19. The stock opened off 1.1%.

The FTSE 250 home furnishings group Dunelm (LON:DNLM) found itself in a similar predicament. After a seemingly resilient showing its stock lost 7.7% of its value.

Ending with some good news – the retirement income specialist Just Group (LON:JUST) was up 15% in the wake its latest trading update, which revealed the business to be in rude financial health.

Proactive news headlines:

Applied Graphene Materials PLC (LON:AGM) has noted that the European Chemical Agency (ECHA) has approved a volume threshold of 1 to 10 tonnes for graphene powder usage per annum for graphene products supplied by the Graphene REACH registration consortium, of which the company is a member. The AIM-listed firm said the approval from the regulator represented a “major milestone” for the graphene industry and will enable members of the consortium to supply quantities of graphene materials in volume. Applied Graphene Materials added that the new volume threshold provided “confidence in the potential for volume quantity use of graphene materials in the range of applications” that members of the consortium are pursuing.

Sensyne Health PLC (LON:SENS) has launched a smartphone app that can accurately read and analyse a lateral flow coronavirus (COVID-19) test in under two seconds. The group’s MagnifEye technology uses a cloud-based deep learning algorithm to automate the process. It can be quickly ‘trained’ for alternative uses such as to assess for cancer, infectious disease and fertility, as well as being deployed for plant pathogen and environmental testing. Marketed as a business-to-business commercial product, it exists not just as a smartphone app but can be incorporated into a website or native software applications.

Landore Resources Limited (LON:LND) said a soil sampling programme carried out along the strike to the east and west of its BAM gold project in Ontario, Canada has established the presence of “widespread anomalous gold” at the site. The explorer said a new soil-till sampling campaign covering 2 kilometres along strike to the east of the project completed in 2020 indicated “multiple gold trends” and recorded the highest soil-till assay results to date, adding that the results supported extending resource drilling at the site.

IQ-AI Ltd (LON:IQAI) said interest continues to increase in its liver surface nodularity (LSN) platform as the med-tech group provided a wide-ranging assessment of its portfolio. Driving interest in the technology, which has regulatory sign-off both in the US and Europe, is its ability to perform virtual biopsies to help assess chronic liver disease for a large patient population. The company said the sales and marketing teams of the company’s channel partners were trained on LSN platform.

AFC Energy PLC (LON:AFC) has signed a strategic engineering collaboration with Ricardo PLC (LON:RCDO), the global engineering consultancy. The primary focus of the collaboration will be on finding ways to exploit AFC’s alkaline fuel cell technology, particularly in the marine (shipping and ports), rail and stationary power generation markets, where Ricardo is seen as one of the market leaders. The AIM-listed hydrogen power technology specialist said the marine applications will consider the benefits of using green ammonia as a key vector for the storage of energy, leveraging the ability of AFC’s fuel cells to use low-cost hydrogen derived from cracked ammonia.

Eurasia Mining PLC (LON:EUA has provided an update on the formal sale process initiated by the company under the UK Takeover Code on July 1, 2020. The palladium, platinum, rhodium, iridium and gold producing company said it and its advisers have engaged with a wide range of parties, and have to date received non-binding offers in respect of both a possible acquisition of the company as well as other transaction structures. The group added that progress to date has been slower than expected reflecting the complexity of the process, involving several parties and structures, as well as external factors including coronavirus (COVID-19) related travel restrictions.

Anglo Asian Mining PLC (LON:AAZ)  has reported record revenues for 2020 as higher gold prices offset disruption from coronavirus (COVID-19) and the new outbreak of fighting between Azerbaijan and Armenia. The AIM-listed group’s Gedabek mine in Azerbaijan produced 69,000 ounces of gold equivalent ounces during 2020 compared to 82,800 a year earlier, but this decline was offset by a 26% rise in the average gold price achieved from sales to US$1,777 per ounce. Revenues for the year topped US$100mln as a result, Anglo Asian said, while cash generation was also strong with the group paying off all of its debt and ending the year with net cash of US$21.2mln.

Capital Ltd (LON:CAPD) has highlighted current market conditions that are extremely positive for its drilling business with its revenue growth boosted by robust gold prices and strong levels of tendering activity. In a trading update, the drilling contractor said its full-year revenue amounted to US$135mln for 2020, up 18% on the prior year. Revenue in the fourth quarter rose by 13% to US$34.6mln. Rig utilisation in the period was marked at 59% which was in-line with the comparative figure for 2019. It had 94 rigs at the end of the year.

IronRidge Resources Limited (LON:IRR) said drilling has commenced at the Ewoyaa lithium project in Ghana in an attempt to expand the resource at the site. The AIM-listed company said the first hole drilled has intersected visible spodumene, a source of lithium, on a new target within 500 metres (m) of the current resource, adding that 10,000m of the total 12,500m of planned drilling is designed to test seven high-priority targets to add potential resource tonnes. IronRidge said the remaining 2,500m of drilling will test an additional three exploration targets; Ndasiman, Amoanda and Hweda within the Saltpond and Apam West licenses, which are located within adjoining exploration licences and form part of an ongoing pipeline of project development within its “highly prospective” lithium portfolio.

Pembridge Resources PLC (LON:PERE) has announced the appointments of a new president and interim CFO of Minto Explorations Ltd. The group said the board of directors and the joint advisory committee (JAC) of Minto have appointed Christopher A. Stewart to the position of president as of January 13, 2021. They have also appointed Jack Cartmel to the position of interim CFO of Minto.

Powerhouse Energy Group PLC (LON:PHE) has raised £10mln through an oversubscribed placing of shares at 5.5p a pop. The waste-to-energy specialist said the funds will enable the company to significantly speed up the first commercial-scale distributed modular generation (DMG) installation using the company’s technology, which Powerhouse is looking to achieve by the end of March. Completion of the first reference site will be commercially and strategically important to the company, not least as a springboard for overseas sales and marketing, Powerhouse added.

Tower Resources PLC (LON:TRP) has raised £1.25mln via a share placing as it seeks to restructure its financing arrangements. The company is issuing 384.6mln new shares priced at 0.325p each in the placing, organised by ETX Capital. Proceeds will be used to terminate and repay a US$500,000 loan facility with Shard Capital, which falls due at the end of February. The company said it will repay the facility without triggering conversion options. The remainder of the proceeds will provide working capital and support the company as seismic data from the Algoa-Gamtoos license in South Africa is reprocessed and interpreted.

Condor Gold PLC (LON:CNR) (TSX:COG) said that following the receipt of notices for the exercise of warrants from Mark Child, its executive chairman and Jeffrey Karoly, its chief financial officer the group is issuing 33,333 new ordinary shares with a nominal value of 20p each in the capital of the company at a subscription price of 31p per share, comprising 20,833 shares to Child and 12,500 shares to Karoly. The company has received gross proceeds of £10,333. Following the issue, Child will be interested in 4,200,730 Condor Gold ordinary shares representing 3.5% of the company’s enlarged issued share capital and Karoly will be interested in 149,078 ordinary shares representing 0.1% of the company’s share capital.

Caledonia Mining Corporation PLC (LON:CMCL) said it received notification yesterday from BlackRock, Inc., which is a “significant shareholder” of the company that it crossed a particular threshold for notification of its holdings in the company on January 12, 2021.  According to the notification, as at that date, the shareholder holds indirectly 604,129 voting rights attached to the shares in the company, which represents 4.98% of the issued share capital; and has an interest in 0.53% of voting rights through financial instruments (represented by 32,800 voting rights that may be acquired through securities lending and 31,675 voting rights in the form of CFD). Accordingly, the shareholder’s total interest in voting rights equates to 5.51% of the company’s issued share capital which, as at this date, comprises 12,118,823 shares of no par value. 

Redx Pharma PLC (LON:REDX), the drug discovery and development company focused on cancer and fibrosis, has said it will be releasing its preliminary results for the full year ended September 30, 2020, on January 27, 2021. A live webcast for analysts will be held at 12.00pm on January 27, 2021.  To join the webcast, investors should register in advance by sending an e-mail to [email protected]. A recording of the webcast will be made available on Redx Pharma’s website following the results meeting.

Touchstone Exploration Inc. (LON:TXP) (TSX:TXP), an oil and gas exploration and production company active in the Republic of Trinidad and Tobago, has said it will be presenting at the Proactive Investors One2One virtual investor forum today, January 14, 2021 at 18:00 GMT. The presentation, given by Paul Baay, CEO, will be followed by a virtual Q&A session. To register for the event please use the following link: https://www.proactiveinvestors.co.uk/register/event_details/311

6.50am: Footsie called higher

The FTSE 100 is expected to start Thursday on the front foot as global equity markets were given a temporary pause from volatility.

IG Markets sees London’s blue-chip index up around 17 points, making the price 6,764 to 6,767 with just over an hour to go until the open.

It follows on from a calm Wednesday session which came and went without any major market shaking headlines.

“Volatility in the markets was low across the board yesterday. There was no change to the macroeconomic outlook, hence why trading ranges were relatively small,” said David Madden, analyst at CMC Markets.

“The health crisis is still bubbling away in the background, which means that governments are expected to maintain their current lockdowns. To an extent, that is being counteracted by the distribution of vaccines but realistically speaking that process will be drawn out.”

On Wall Street, the Dow Jones Industrials Average closed in negative territory dipping 8 points or 0.02% to finish Wednesday’s session at 31,060.

The S&P 50 marked a 0.23% gain as it closed at 3,809 and the Nasdaq Composite added 0.43% as it ended the trading day at 13,128. The small-caps Russell 2000 index, meanwhile, dropped 0.75% to finish Wednesday at 2,111.

In Asia, Japan’s Nikkei this morning advanced 241 points or 0.85% to trade at 28,698 whilst Hong Kong’s Hang Seng moved up 0.59% to 28,426. The Shanghai Composite traded negatively, down 0.8% at 3,569.

Around the markets:

  • The pound: US$1.3654, down 0.04%
  • Gold: US$1,843 per ounce, down 0.24%
  • Silver: US$25.27 per ounce, down 0.3%
  • Brent crude: US$55.97, down 1.07%
  • WTI crude: US$52.90, down 0.58%
  • Bitcoin: US$37,864, up 11.42%

6.45am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Thursday as China’s exports rose 18.1% in December compared with a year earlier, according to customs data.

In Japan, the Nikkei 225 led gains among the region’s major markets rising 0.85% while South Korea’s Kospi gained 0.04%.

Mainland Chinese stocks declined with the Shanghai Composite shedding 0.81%.

Hong Kong’s Hang Seng index advanced 0.61% and in Australia, the S&P/ASX 200 closed 0.43% higher.

Proactive Australia news:

YPB Group Ltd (ASX:YPB) has secured a Master Services Agreement (MSA) with Legitifli, a product authentication solutions distributor focused on the US reseller market for sportswear apparel, sneakers, streetwear, accessories and collectables.

Eclipse Metals Ltd (ASX:EPM) has entered a “transformational” agreement to acquire the Ivittuut Project in Greenland which is the world’s largest and only source of naturally occurring cryolite – an extremely rare mineral in commercial quantities.

Lithium Australia NL (ASX:LIT) (FRA:3MW) has entered into an acquisition and joint venture agreement with Galan Lithium Ltd (ASX:GLN) (FRA:9CH) for the sale of its 80% interest in the Greenbushes South Lithium Project.

Kin Mining NL’s (ASX:KIN) (FRA:8KM) Iron King Project near Leonora in Western Australia has the potential to emerge as a new greenfields discovery after the company received strong new assay results from recent aircore drilling.

Horizon Minerals Ltd (ASX:HRX) (OTCMKTS:HZNM) is preparing itself for a new gold growth phase as it moves forward with its largest-ever exploration program with up to four drill rigs in operation at its 890 square kilometres 100%-owned tenement package.

Orthocell Ltd (ASX:OCC) has received Food and Drug Administration’s (FDA) 510(k) clearance to market and supply its CelGro collagen medical device for dental bone and tissue regeneration procedures in the US.

Yandal Resources Ltd (ASX:YRL) has received further encouragement from high-grade results at Gordons Dam prospect within the Gordons Gold Project in the highly prospective Kalgoorlie-Boulder Region of Western Australia.

MMJ Group Holdings Ltd’s  (ASX:MMJ) (OTCMKTS:MMJJF) (FRA:2P9) shares outshined the benchmark Alternative Harvest ETF in the month of December by rising 8% compared to a negative 10% for the benchmark.

Pantoro Ltd (ASX:PNR) is well-placed to fund development activities at the high-value Norseman Gold Project after achieving free cashflow of $7.6 million at the Halls Creek Project for the quarter ending December 31, 2020.

Metro Mining Ltd (ASX:MMI) (FRA:6ME) plans to resume operations at its Bauxite Hills mine in Far North Queensland in April after shutting down for the wet season – in time for deliveries recommencing under the existing contract with Xinfa.

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